The Myth That Dems Will End Private Health Insurance

One of the major talking points from the punditocracy, especially from the pretend-to-be moderates in never-Trump land, is that the Democrats are moving so far to the left that they will never win in 2020. One of the supposed “proofs” of that position is that Elizabeth Warren, Bernie Sanders, and Kamala Harris all raised their hands when asked in the first round of Democratic debates if their health care plans would “ban” private health insurance, although Harris somewhat backtracked on the question the next day. Unsurprisingly, this somehow gets translated in the punditocracy as though the various Democratic proposals for universal health care and Medicare for All, in particular, would actually prevent the existence of private health insurance.

In fact, there is no current Democratic health care plan that would ban the existence of all private health insurance. There is a plan that would potentially provide no real reason for it but most plans would work in the same way that the current Medicare plan does, which allows for supplementary or complementary insurance. Supplemental insurance can and will still be available for certain procedures, such as, say, dental coverage, that Medicare for All may not cover. Complementary insurance would also still be available to cover any cost-sharing that Medicare for All or other universal plan might require. What Medicare for All, like Medicare itself, does ban is duplicative insurance. In other words, private insurance can not duplicate coverage offered under the plan.

Sanders’ Medicare for All plan envisions no cost sharing, which would essentially eliminate complementary insurance simply because there would be no need for it. The plan is also so generous that it seems there would be little room for supplemental insurance either. In both cases, there is no specific “ban”; there is just no real market for the insurance.

What might be allowed under Medicare for All is so-called concierge health care. In that situation, individuals contract directly with doctors for treatment. Usually, that involves a some sort of annual fee for service and is primarily used for a primary care doctor or faster access to regular medical services. This is the type of situation that exists in Canada. In the US, concierge health care is, because of the higher cost, usually only available to higher income individuals and it is estimated that under 5% of people would opt for this option under Medicare for All.

When the punditocracy talks about “banning private insurance”, what they really mean is that there will be no need for the private insurance that most Americans get through their work. And, as David Frum is fond of pointing out, “69% of Americans are satisfied with their healthcare coverage. 80% are satisfied with their health care quality. Democrats are offering bold radical reinvention of a system to a country that wants incremental improvement”. From that, the pundits extrapolate that Americans will hate losing the insurance they get through their workplace. But polling also indicates that the majority of Americans could care less who their insurer is as long as they have access to the doctor and hospital they prefer, costs being equal. That is probably even more true of those who have had to fight their insurance company after certain medical procedures. In addition, many current private insurers require their subscribers to only use a select providers within network or to pay more to use a doctor out of network. That requirement would disappear with Medicare for All, actually expanding the universe of medical options for most Americans.

Yes, there are a lot of questions about Medicare for All, especially the overall cost and reimbursement rates for doctors and hospitals. Those are real issues. The banning of private insurance is not. It is yet another media-created red herring and a meaningless “gotcha” question for Democratic candidates.